El Salvador’s Ministry of Finance has reported a 3.1% year-over-year increase in tax revenue collection for the first quarter of 2025, reaching $1,937.8 million by the end of March. This performance exceeded budget expectations by $70.2 million, or 3.8%, as the government strengthens its fiscal position through economic growth and enhanced tax enforcement.

The figures represent a $58.6 million increase compared to the same period in 2024. The Value Added Tax (VAT) was the primary driver of this growth, contributing $941.5 million—a 7.6% rise year-over-year. Within this category, VAT on imports reached $499.3 million, while domestic VAT collections totaled $442.2 million, with increases of 8.1% and 7.2%, respectively.

Excise taxes, applied to products such as alcohol, tobacco, and sugary beverages, generated $56.1 million. Meanwhile, taxes from immigration, tourism, and real estate transfers totaled $29.5 million—reflecting a 16.3% increase from the previous year.

Finance Minister Jerson Posada affirmed that total tax revenues for 2025 are projected to reach $7,677.6 million, an increase of $747 million (5.6%) over the previous year. This growth is attributed to rising economic activity, public safety improvements, and the continued expansion of the tourism and construction sectors, alongside anti-evasion strategies.

In terms of income tax (ISR), the General Directorate of Internal Revenue expects to collect $635 million for the 2024 fiscal year. Over 836,000 tax returns are anticipated, marking a 3.08% rise compared to the 811,000 returns filed last year. Director Marvin Sorto cautioned that taxpayers who fail to file may face fines of up to 40% of the unpaid tax, and potential prosecution for tax evasion.

These results underline the Salvadoran Government’s commitment to fiscal discipline and financial sustainability, aligning with the 2025 national budget of $9,663 million, of which 79.4% is expected to be financed through tax revenues.